While at Wichita State, McDaniel was the first person to lead the nation in both rebounding and scoring in the same season. In college, McDaniel began to shave both his head and his eyebrows to look more intimidating. He continued this all throughout his pro career.

For his first two seasons at Wichita State, the Shockers were on NCAA probation. He was a teammate his freshman year of future NBA players Antoine Carr and Cliff Levingston. When Levingston left for the NBA, McDaniel became a starter and averaged 18.8 points and 14.4 rebounds as power forward opposite Carr. The following season, Carr left, and McDaniel raised his scoring average to 20.6 points per game and was the Missouri Valley Conference MVP. He then led the nation in scoring (27.4) and rebounding (15.0) his senior season becoming the first player to do so.

His second season, he was one of a trio of 20 ppg scorers with the SuperSonics along with Dale Ellis and Tom Chambers. The SuperSonics made it all the way to the Western Conference finals that season. He averaged over 20 points per game for the next three seasons as a Sonic, including the 1988–89 season when he was used primarily as a bench player.

McDaniel was traded fifteen games into the 1990–91 season to the Phoenix Suns for Eddie Johnson and two draft picks. While the trade reunited him with teammate Tom Chambers, it didn't produce the results the Suns were looking for. At season's end, he was dealt to the New York Knicks.

In the Knicks he was a perfect fit in coach Pat Riley's physical style. He gained some notoriety for playing the Chicago Bulls' Scottie Pippen tough in a grueling seven-game playoff series that the Bulls won on their way to their second NBA title.

After retiring McDaniel appeared on Spike TV's televised slamball games where he coached the Riders squad in 2003. Afterwards he made a few appearances on the reality TVgame showPros vs. Joes in 2006. Xavier McDaniel played on the Orange "All-Star" Team with fellow NBA star Clyde Drexler on an episode of Pros vs Joes, who coincidentally also appeared with McDaniel on the same Married... with Children episode 13 years earlier.